Disability Severance Pay?

PicoBaloney said:
Thank you! So to dumb this down for me…
Basically you’d get paid at 90% vs 100% but you’d still be rated 100%?
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Hello,

Your VA rating is not being changed from 100% to 90%. The severance pay would be recouped in your scenario at the amount applicable to a 10% rating in the VA compensation charts.

I suppose you could think of it like a debt that is being deducted each month from salary earned. The gross rate rate of pay is not changed, but the net amount received on payday is reduced.

I will run this by a couple of VA guys tonight.


Ron
 
RonG said:
Hello,

Your VA rating is not being changed from 100% to 90%. The severance pay would be recouped in your scenario at the amount applicable to a 10% rating in the VA compensation charts.

I suppose you could think of it like a debt that is being deducted each month from salary earned. The gross rate rate of pay is not changed, but the net amount received on payday is reduced.

I will run this by a couple of VA guys tonight.


Ron
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Answer by VA rater:

“This my understanding, but I not an authorizer. The waiver for combat, and combat-like injuries as you described is correct and the only part RVSRs have in these cases. “
Ron
 
Ok correct me if i am wrong but can't you waive Disability severance pay and take the VA compensation?
 
Rattler said:
Ok correct me if i am wrong but can't you waive Disability severance pay and take the VA compensation?
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Even if you could I wouldn't. Its basically an interest free loan. You can then take the severance and put it in an account getting 4% to 5% interest on it.

I think you have a chance to keep the severance and have no recoupment with some strategies in place. For example if you add other VA disability conditions within 1 year the VA will backdate to the day after you get out. Meaning you may be able to work on getting other conditions added to nullify the recoupment of severance AND get paid the full amount of VA compensation. You will have to do some research on this but from a high level overview I think it could work!
 
Provis said:
Even if you could I wouldn't. Its basically an interest free loan. You can then take the severance and put it in an account getting 4% to 5% interest on it.

I think you have a chance to keep the severance and have no recoupment with some strategies in place. For example if you add other VA disability conditions within 1 year the VA will backdate to the day after you get out. Meaning you may be able to work on getting other conditions added to nullify the recoupment of severance AND get paid the full amount of VA compensation. You will have to do some research on this but from a high level overview I think it could work!
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Using this strategy, wouldn’t it make a lot of sense to just settle with a disability severance and champVA vs appealing for the sake of tricare?
I understand tricare covers more but it’s not like you’re going to be without healthcare. And I’ve heard good things about champVA. Just not as good as tricare
 
PicoBaloney said:
Using this strategy, wouldn’t it make a lot of sense to just settle with a disability severance and champVA vs appealing for the sake of tricare?
I understand tricare covers more but it’s not like you’re going to be without healthcare. And I’ve heard good things about champVA. Just not as good as tricare
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I don't think you understand the strategy. Its there to avoid recoupment of VA meaning that due to receiving a lump sum severance payment they will lose some of their monthly VA compensation. If you can get to 100% VA without counting the conditions that are found unfitting you get to keep 100% of the VA compensation and all of the severance payment.
 
No I understand. But 100k at 4-5% interest over 25 years is well worth having $300/month recouped for 25 years…
 
PicoBaloney said:
No I understand. But 100k at 4-5% interest over 25 years is well worth having $300/month recouped for 25 years…
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There are downsides. With a chapter 61 retirement you get tricare for you and family for life guaranteed. CHAMPVA isn't guaranteed since your rating can be reduced in the future. Also, with VA compensation your floor is zero even if not very likely. With the chapter 61 pension your floor for compensation is whatever the compensation is for that pension. With a chapter 61 medical retirement they may qualify for CRSC meaning it is possible to get all of your VA compensation and all of your longevity portion earned. So lets say you were in for 5 years then that's 10% of your high 3 you could possible get in addition to your VA compensation.

Basically getting severance and VA compensation works fine when everything goes well. However, that isn't as safe of a play verse a chapter 61 pension by getting 30% or higher PDRL.
 
so assuming the DOD rated disability was not combat related, the lump sum severance pay will be taxed.

But the taxed portion can be returned after filing taxes as long as the DOD rated disability is also a compensated VA disability?
 
After 10 years I received a letter that VA is recouping $93,000 disability severance pay.It doesn't say what amount they will be recouping monthly, it just says , We are withholding this amount. (what Amount?)So far my compensation has not changed. I have read some encouraging things on this forum, especially one post but I cant find it again. I am rated and payed at 80%, when you subtract the DOD service disqualifying 10% I am still at 80%. I'm hoping this is the case. I would feel better if if I could find this written somewhere officially in VA Regulations not just people's posts. Will DFAS try to come and take it back another way? This has been very stressful theses past several months waiting to see if I'm going to be bankrupted. When I call the VA all they say is "We are withholding the full amount"
 
The full amount will be recouped unless The exception applies (see bottom part of this post).

From VA Regulation M21-1 :


III.v.4.B.3.b. General Policies Regarding Withholdings to Recoup Disability Severance PayGenerally, if a Veteran received disability severance pay, VA must withhold from his/her monthly compensation an amount equal to the monthly compensation payable for the disability(ies) for which the Veteran received disability severance pay. VA continues to withhold this amount until it has recouped the amount specified in M21-1, Part III, Subpart v, 4.B.2.d.

Important:
  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part III, Subpart v, 4.B.3.c, that VA assigns the severance-pay disability(ies).
  • If a Veteran has multiple, severance-pay disabilities, each rated 0-percent disabling, and VA assigns a 10-percent disability rating to them under 38 CFR 3.324, no withholding is necessary for these disabilities until VA assigns a compensable rating to one or more of them, individually.
  • Withhold the additional benefits payable because of application of the bilateral factor if
    • the initial, compensable rating included application of the bilateral factor, and
    • entitlement to the bilateral factor was based exclusively on severance-pay disabilities.

Ron

added:
The VA is required by law to withhold disability compensation payments for servicemembers who received a disability severance payment when they separated from the military (Chapter 61), if the VA disability compensation is for the same disability. This is to prevent a veteran from receiving duplicate benefits.

Exception: The VA will not deduct compensation pay if the military disability severance pay was received for disabilities incurred in line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Department of Defense (DoD).

Ron
 
Do you have any ideas why my monthly VA Compensation has not reduced? My 10% Service Disqualifying Condition was non combat
 
Darisp2 said:
Do you have any ideas why my monthly VA Compensation has not reduced? My 10% Service Disqualifying Condition was non combat
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If you are speaking about the recoupment process, I have no idea when that will begin.

If you are asking why your service connected VA rating at 10% has not changed, you remain entitled to it. The disability severance pay is what you are not entitled.

See Manage your VA debt for benefit overpayments and copay bills | Veterans Affairs <—-LINK for related information.

Ron
 
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Provis said:
I don't think you understand the strategy. Its there to avoid recoupment of VA meaning that due to receiving a lump sum severance payment they will lose some of their monthly VA compensation. If you can get to 100% VA without counting the conditions that are found unfitting you get to keep 100% of the VA compensation and all of the severance payment.
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if I'm rated at 100 P&T VA and 10%dod with severance pay, and if I take out that 10 percent I'm still at 100% do they recoup my severance, and can you please point me in the right direction on where can I find that info I been reading and I guess I'm not really understanding all of this.
 
Darisp2 said:
Do you have any ideas why my monthly VA Compensation has not reduced? My 10% Service Disqualifying Condition was non combat
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Doesn't need to be combat-related, it just has to be the referred condition that the DoD found you "unfit" for. So, when you take that 10% out of the total combined rating by the VA, do you still end up at 100%? If yes, there's no recoupment, if no, ie, you drop to 94% which is rounded DOWN to 90%, then there's recoupment at 10% (currently approx $170/mo)
 
SAMM95 said:
if I'm rated at 100 P&T VA and 10%dod with severance pay, and if I take out that 10 percent I'm still at 100% do they recoup my severance, and can you please point me in the right direction on where can I find that info I been reading and I guess I'm not really understanding all of this.
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No, they will NOT recoup since you're still rated at 100% by the VA.
 
Darisp2 said:
After 10 years I received a letter that VA is recouping $93,000 disability severance pay.It doesn't say what amount they will be recouping monthly, it just says , We are withholding this amount. (what Amount?)So far my compensation has not changed. I have read some encouraging things on this forum, especially one post but I cant find it again. I am rated and payed at 80%, when you subtract the DOD service disqualifying 10% I am still at 80%. I'm hoping this is the case. I would feel better if if I could find this written somewhere officially in VA Regulations not just people's posts. Will DFAS try to come and take it back another way? This has been very stressful theses past several months waiting to see if I'm going to be bankrupted. When I call the VA all they say is "We are withholding the full amount"
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Ok, I scrolled up further: you would have to be at 100%, not anything less
 
DeputyDog said:
I have an interesting situation with my Severance and my MSC didn't really have a clear answer for me.

To keep it as simple as possible....
I was awarded 100%P&T per the VA/ 0% from the DoD for my disqualifying disability. Also note, my boardable disability was deemed "not rated" by the VA.
We're trying to find out if I have to pay this dang severance back or not! As an E-7 with 11 years of service its not a small amount of pennies.
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I will likely be in this exact position in a few months.
 
ChugNorris said:
I will likely be in this exact position in a few months.
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Hello,

I did not see a question, but @Provis answered DeputyDog’s question with, “No, you will not have to…”

The basis:

Recoupment is required ONLY when the DoD and the VA BOTH provide a rating or ratings for the same disability or disabilities.
The following is part of a longer explanation that is posted in this thread. It explains the rate of collection/recoupment.

Ron

III.v.4.B.3.b. General Policies Regarding Withholdings to Recoup Disability Severance PayGenerally, if a Veteran received disability severance pay, VA must withhold from his/her monthly compensation an amount equal to the monthly compensation payable for the disability(ies) for which the Veteran received disability severance pay. VA continues to withhold this amount until it has recouped the amount specified in M21-1, Part III, Subpart v, 4.B.2.d.

Important:
  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part III, Subpart v, 4.B.3.c, that VA assigns the severance-pay disability(ies).
  • If a Veteran has multiple, severance-pay disabilities, each rated 0-percent disabling, and VA assigns a 10-percent disability rating to them under 38 CFR 3.324, no withholding is necessary for these disabilities until VA assigns a compensable rating to one or more of them, individually.
  • Withhold the additional benefits payable because of application of the bilateral factor if
    • the initial, compensable rating included application of the bilateral factor, and
    • entitlement to the bilateral factor was based exclusively on severance-pay disabilities.
Ron
 
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